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ABI Research Anticipates Accelerated Adoption of Automotive Software Over-the-Air Updates with Nearly 180 Million New SOTA-Enabled Cars Shipping Between 2016 and 2022


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ABI Research

15 Mar, 2016, 15:10 GMT

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ABI Research www.abiresearch.com (PRNewsFoto/ABI Research) (PRNewsFoto/ABI Research)

SCOTTSDALE, Arizona, March 15, 2016 /PRNewswire/ -- As the automotive industry ramps up its adoption of Software Over-the-Air (SOTA)-enabled vehicles, ABI Research, the leader in transformative technology innovation market intelligence, forecasts nearly 203 million OTA-enabled cars to ship by 2022. Both SOTA and Firmware Over-the-Air (FOTA) will see a spike, with nearly 180 million new cars supporting SOTA and 22 million FOTA by 2022. Beyond Tesla, car OEMs will primarily focus the next three to five years on SOTA versus the still nascent FOTA upgrade.

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"Three factors changed the course of the automotive industry and paved the way for the future of OTA: recall cost, Tesla's success as the foundation of autonomous driving, and security risks based on software complexities," says Susan Beardslee, Senior Analyst at ABI Research. "It is a welcome transformation, as OTA is the only way to accomplish secure management of all of a connected car's software in a seamless, comprehensive, and fully integrated manner."

The positive changes that OTA can bestow on the car recall process is alone a vital benefit. In the past two years, the recall rate increased to approximately 46% with four major car OEMs setting aside a combined $20 billion in 2015 in warranty reserves. Though not all recalls can be fixed via an OTA update, ABI Research market analysis suggests that close to one-third of last year's recalls could have been addressed over the air, saving car OEMs at least $6 billion.

A Chrysler, Dodge, Jeep, and Ram recall last year addressed a hacking incident with a Jeep, which affected 1.4 million vehicles. To rectify the situation, the OEMs sent USB drives to the identified customers. This method, in place of an OTA update, increased security risk, the plausibility of owner identification, and the inability to ensure that the patch was done and done correctly. Ford and Toyota also faced similar situations through their own recalls.

As the level of vehicle autonomy accelerates, cybersecurity will become increasingly critical. To address cybersecurity risks that stem from software upgrades, ABI Research anticipates the automotive industry will begin to see more mergers and acquisitions over the next two years as car OEMs emphasize the value of software management solutions.

"Movimento, in particular, is a huge acquisition opportunity," continues Beardslee. "One of the leading software management vendors in the automotive industry, Movimento reflashes more than 3 million vehicles per year and can detect and delete cyberattacks within 10 milliseconds. With security a leading focus of OTA, Argus Cybersecurity is another likely target, having received Series B funding from Magna International and recently partnering with pure play security vendor CheckPoint Software Technologies."

But this industry change is not without its challenges: particularly, the threat to car dealerships and the danger of customers opting out of software upgrades. "The car dealers have everything to lose," concludes Beardslee. "When the automotive industry becomes fully OTA, car dealers lose not only the revenue enhancement that they acquire in making updates and repairs, but they lose the associated foot traffic. Customer opt outs, on the other hand, were a challenge long before the arrival of OTA and one that car OEMs will likely find a way to address as they move toward a recurring revenue generation model in the early 2020s."

These findings are part of ABI Research's Automotive Infotainment Service (https://www.abiresearch.com/market-research/service/automotive-infotainment/) and Automotive Safety and Autonomous Driving Service (https://www.abiresearch.com/market-research/service/safety-and-security-telematics/), which include research reports, market data, insights, and competitive assessments.

About ABI Research

For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit www.abiresearch.com.

Contact Info: Christine Gallen

Tel: +1.516.624.2542


pr@abiresearch.com

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